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Overview
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OverviewAbout the Billing APIs
Tax
Overview
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OverviewReports for multiple accounts
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Overview

Taxes

Learn about Stripe Tax and how to use it with invoices.

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On an invoice, Stripe Tax calculates sales tax, VAT, and GST. To calculate these for each line item, Stripe uses:

  • Your tax settings
  • The customer’s tax settings and location
  • The product tax code and price tax behavior

Stripe calculates the tax at the published rate at the time of invoice finalization. For example, if you initialize an invoice draft on December 20 and set it to finalize on January 15, then January 1 introduces a new tax rate. Subsequently, Stripe calculates the invoice at the new rate.

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Set up the customer

We use the customer’s location to determine the relevant taxes to collect. Different countries have different setup requirements:

  • Customers outside of the US require at least a country-level address.
  • Customers in the US require a 5-digit postal code.
  • Customers in Canada require either the province or postal code.

You can add customer location information in the Customer details page by clicking Edit next to Details. To add a customer’s location from the Invoice Editor, click the overflow menu () next to the customer. Select Edit customer information, click Add additional details, and scroll down to Billing details.

After you update the location, click Update customer. Stripe applies the new location to all of your customer’s future invoices unless you update it. For more information, see Determine customer locations.

Set up line items

To calculate tax on each line item on an invoice, you need to set a tax behavior and optionally a tax code.

Customize tax settings for one-off line items

Customize line items in the Invoice Editor by selecting the tax behavior from the Include tax in price drop-down menu.

Customize tax settings for product-based line items

You can use both the Dashboard and the API to customize tax settings for product-based line items.

On the Products page, you can select both the tax behavior for a particular price and the optional tax code for the product. The tax behavior is per price. You can’t change the tax behavior after you select it, but you can create new prices or archive old ones. To set up a tax behavior, click Add a price (or Add another price if you already have one) and select it from the Tax behavior drop-down menu.

To set up a tax code, select it from the Tax code drop-down menu when you create a new product or edit the details of an existing one.

Enable automatic tax

Note

Log in or sign up for Stripe to enable Stripe Tax.

Enable the Use automatic tax collection toggle on the tax settings page to automatically enable tax calculation on new invoices you create in the Dashboard.

Update untaxed invoices

To enable automatic tax calculation for existing invoices:

  1. Click Edit invoice from the Invoice details page, or click the invoice’s overflow menu (), then Edit invoice from the Invoices page to create a new draft in the Invoice Editor.
  2. In the editor, turn on the Collect tax automatically toggle.
  3. If customer is missing address information required for tax calculation, a notification badge alerts you and provides instructions to resolve the problem.
  4. Save the invoice to enable automatic tax calculations on all future instances of the invoice. Learn more about editing invoices after finalization.

Update invoices with existing tax rates

To replace invoice tax rates with automatic tax calculation, follow the previous steps to edit the invoice. Then remove the applied tax rates and enable the Collect tax automatically toggle.

For more information on automatic tax calculation, see Automatically collect tax on invoices.

Net prices and taxes

You can issue invoices with line item prices that exclude inclusive tax. Tax-exclusive prices are only shown in the invoice PDF. That means, when using inclusive tax, the Hosted Invoice Page and invoice emails show tax-inclusive prices. You can define the settings for net prices in the Dashboard or API.

  • Include inclusive tax—The invoice PDF displays line item prices including the inclusive tax. (This is the default.)
  • Exclude tax—The invoice PDF displays line item prices excluding tax.

Order precedence

If you set a default for line item prices at the customer level, it takes precedence over account-level settings.

To set a default for item prices, go to Default item prices in the Invoice template. Your chosen setting applies to all of the invoices you create through the Dashboard or API. For one-off invoices, use the Invoice Editor to set tax exclusivity. Go to Advanced options and choose to Include inclusive tax or Exclude tax. To learn more, see Create an invoice.

See also